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Museum of Science Financial Statements June 30, 2019 and 2018
Museum of Science Financial Statements — June 30, 2019 and 2018
Table of Contents
Independent Auditors’ Report .......................................................................................................................... 1‐2
Financial Statements
Statements of Financial Position ........................................................................................................... 3
Statements of Activities ...................................................................................................................... 4‐5
Statements of Functional Expenses ....................................................................................................... 6
Statements of Cash Flows ...................................................................................................................... 7
Notes to the Financial Statements ................................................................................................................... 8‐27
Independent Auditors’ Report
Board of Trustees
Museum of Science
Boston, Massachusetts
We have audited the accompanying financial statements of the Museum of Science (the “Museum”), which
comprise the statements of financial position as of June 30, 2019 and 2018, and the related statements of activities,
functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Museum of Science as of June 30, 2019 and 2018, and the changes in its net assets and its cash
flows for the years then ended in accordance with accounting principles generally accepted in the United States
of America.
Emphasis of Matters
As discussed in Note 2 to the financial statements in 2019, the Museum adopted Accounting Standards Update
(“ASU”) No. 2016‐14, Not‐for‐Profit Entities – Presentation of Financial Statements of Not‐for‐Profit Entities and No.
2018‐8, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. Our
opinion is not modified with respect to these matters.
October 31, 2019
Boston, Massachusetts
Museum of Science Statements of Financial Position — June 30
3
(in thousands) 2019 2018
ASSETS 13
Current assets
Cash and cash equivalents 35,444$ 32,471$
Accounts receivable 2,484 1,315
Grants receivable 1,129 1,372
Pledges receivable, net 5,101 5,160
Prepaid expenses and other current assets 1,353 1,146
Total current assets 45,511 41,464
Noncurrent assets
Pledges receivable, net 1,336 2,387
Investments 180,617 160,961
Assets of split interest agreements 17,676 16,535
Other assets, net of amortization 1,161 1,035
Property, plant and equipment, net 66,985 68,330
Total noncurrent assets 267,775 249,248
Total assets 313,286$ 290,712$
LIABILITIES AND NET ASSETS
Current liabilities
Accounts payable and accrued liabilities 5,201$ 5,666$
Deferred revenue 4,786 4,752
Total current liabilities 9,987 10,418
Noncurrent liabilities
Annuity payable and deferred compensation 1,137 1,037
Liability under split interest agreements 1,457 1,523
Liability under management agreement 974 1,180
Asset retirement obligation 1,536 1,596
Capital leases 1,899 2,323
Total noncurrent liabilities 7,003 7,659
Total liabilities 16,990 18,077
Net assets
Without donor restrictions
Operating funds 66 418
Designated funds 932 1,241
Quasi‐endowment 10,287 10,465
Net investment in plant 62,007 62,771
Total net assets without donor restrictions 73,292 74,895
With donor restrictions
Gifts, grants, and endowment income 42,316 33,764
Endowment principal, split interests, and other 180,688 163,976
Total net assets with donor restrictions 223,004 197,740
Total net assets 296,296 272,635
Total liabilities and net assets 313,286$ 290,712$
The accompanying notes are an integral part of these financial statements.
Museum of Science Statements of Activities for the Years Ended June 30
4
7 7
(in thousands)
Without With Without With
Donor Donor Donor Donor
Restrictions Restrictions Restrictions Restrictions
Income
Support
Contributions, grants, and pledges 5,002$ 33,008$ 38,010$ 5,651$ 19,814$ 25,465$
Contributed services and gifts‐in‐kind 2,086 ‐ 2,086 2,666 ‐ 2,666
Government grants 57 3,679 3,736 57 4,408 4,465
Total support 7,145 36,687 43,832 8,374 24,222 32,596
Revenue
Admissions 13,596 ‐ 13,596 12,535 ‐ 12,535
Memberships 7,294 ‐ 7,294 7,237 ‐ 7,237
Educational programs 10,562 ‐ 10,562 10,835 18 10,853
Ancillary services 8,329 ‐ 8,329 7,303 ‐ 7,303
Investment return appropriated for
spending per endowment policy 2,313 3,587 5,900 2,030 3,437 5,467
Other income 2,397 177 2,574 2,221 147 2,368
Net assets released from restrictions 17,637 (17,637) ‐ 14,988 (14,988) ‐
Total revenue 62,128 (13,873) 48,255 57,149 (11,386) 45,763
Total income 69,273 22,814 92,087 65,523 12,836 78,359
Expenses
Program services
Exhibits 10,436 ‐ 10,436 11,140 ‐ 11,140
Education and outreach programs 9,438 ‐ 9,438 9,648 ‐ 9,648
Teacher and curriculum programs 10,651 ‐ 10,651 9,944 ‐ 9,944
Visitor and member services 4,944 ‐ 4,944 4,963 ‐ 4,963
Other program activities 3,902 ‐ 3,902 3,758 ‐ 3,758
Total program services 39,371 ‐ 39,371 39,453 ‐ 39,453
Supporting services
Administration and general 10,136 ‐ 10,136 9,887 ‐ 9,887
Facility operations 8,745 ‐ 8,745 8,393 ‐ 8,393
Marketing 6,446 ‐ 6,446 7,298 ‐ 7,298
Fundraising 6,191 ‐ 6,191 5,829 ‐ 5,829
Total supporting services 31,518 ‐ 31,518 31,407 ‐ 31,407
Total expenses 70,889 ‐ 70,889 70,860 ‐ 70,860
Change in net assets from income and expenses (1,616) 22,814 21,198 (5,337) 12,836 7,499
Transfers (70) 70 ‐ (43) 43 ‐
Investment return, net 731 7,324 8,055 1,165 12,247 13,412
Portion of investment return appropriated for
spending per endowment policy (648) (5,252) (5,900) (607) (4,860) (5,467)
Change in value of split‐interest agreements ‐ 308 308 ‐ 1,125 1,125
Change due to separation of business unit ‐ ‐ ‐ (1,019) (453) (1,472)
Change in net assets (1,603) 25,264 23,661 (5,841) 20,938 15,097
Net assets, beginning of year 74,895 197,740 272,635 80,736 176,802 257,538
Net assets, end of year 73,292$ 223,004$ 296,296$ 74,895$ 197,740$ 272,635$
Total
2019
Total
2018
The accompanying notes are an integral part of these financial statements.
Museum of Science Statements of Functional Expenses for the Years Ended June 30
5
(in thousands)
Exhibits
Education
and
outreach
Teacher and
curriculum
Visitor and
member
services
Other
program
activities
Total
program
services
Admin. and
general
Facility
operations Marketing Fundraising
Total
supporting
services Total
Personnel costs 4,783$ 5,316$ 4,355$ 2,797$ 2,650$ 19,901$ 5,202$ 2,518$ 2,155$ 3,989$ 13,864$ 33,765$ Cost of goods sold ‐ ‐ 3,440 ‐ ‐ 3,440 ‐ ‐ ‐ ‐ ‐ 3,440 Equipment and fixtures 48 37 357 21 112 575 114 80 43 89 326 901 Conferences and travel 211 200 442 9 69 931 120 1 42 71 234 1,165 Participant support ‐ 342 407 ‐ 2 751 ‐ ‐ ‐ ‐ ‐ 751 Supplies and materials 347 130 110 71 70 728 53 201 25 112 391 1,119 Outside services 573 737 990 729 429 3,458 2,363 566 4,073 1,276 8,278 11,736 Occupancy 1 6 24 9 24 64 95 2,335 8 7 2,445 2,509 Subawards 619 693 33 ‐ 8 1,353 ‐ ‐ ‐ ‐ ‐ 1,353 Scholarships and funded fees ‐ 469 255 100 ‐ 824 ‐ ‐ ‐ 48 48 872 Interest ‐ ‐ ‐ 68 ‐ 68 2 79 ‐ ‐ 81 149 Depreciation and amortization 3,307 815 112 345 219 4,798 1,373 2,492 21 29 3,915 8,713 Losses on disposal 119 ‐ ‐ ‐ ‐ 119 46 461 ‐ ‐ 507 626 Miscellaneous and other 428 693 126 795 319 2,361 768 12 79 570 1,429 3,790
Total expenses 10,436$ 9,438$ 10,651$ 4,944$ 3,902$ 39,371$ 10,136$ 8,745$ 6,446$ 6,191$ 31,518$ 70,889$
Exhibits
Education
and
outreach
Teacher and
curriculum
Visitor and
member
services
Other
program
activities
Total
program
services
Admin. and
general
Facility
operations Marketing Fundraising
Total
supporting
services Total
Personnel costs 4,763$ 5,583$ 4,108$ 2,752$ 2,633$ 19,839$ 4,927$ 2,383$ 1,947$ 3,754$ 13,011$ 32,850$ Cost of goods sold ‐ ‐ 3,402 ‐ ‐ 3,402 ‐ ‐ ‐ ‐ ‐ 3,402 Equipment and fixtures 73 38 58 20 75 264 94 111 14 48 267 531 Conferences and travel 252 197 269 10 55 783 173 2 70 189 434 1,217 Participant support 72 499 532 ‐ 8 1,111 ‐ ‐ ‐ ‐ ‐ 1,111 Supplies and materials 369 156 124 60 44 753 67 174 43 123 407 1,160 Outside services 909 578 1,183 670 193 3,533 2,276 618 5,060 1,210 9,164 12,697 Occupancy 6 8 6 7 33 60 77 2,459 17 11 2,564 2,624 Subawards 601 648 8 ‐ 174 1,431 ‐ ‐ ‐ ‐ ‐ 1,431 Scholarships and funded fees 16 386 28 100 ‐ 530 ‐ ‐ ‐ 33 33 563 Interest ‐ ‐ ‐ 79 ‐ 79 8 91 2 ‐ 101 180 Depreciation and amortization 3,362 821 102 350 199 4,834 1,509 2,540 30 30 4,109 8,943 Losses on disposal 95 33 10 ‐ ‐ 138 21 ‐ ‐ 7 28 166 Miscellaneous and other 622 701 114 915 344 2,696 735 15 115 424 1,289 3,985
Total expenses 11,140$ 9,648$ 9,944$ 4,963$ 3,758$ 39,453$ 9,887$ 8,393$ 7,298$ 5,829$ 31,407$ 70,860$
Program services
2019
Supporting services
2018
Program services Supporting services
The accompanying notes are an integral part of these financial statements
Museum of Science Statements of Cash Flows for the Years Ended June 30
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(in thousands)
2019 2018
Cash flows from operating activities
Cash received from customers 37,805$ 37,430$
Cash received from donors 18,277 14,585
Cash received from government agencies 3,678 4,035
Cash received from others 992 700
Cash paid to or on behalf of employees (32,847) (32,230)
Cash paid to vendors (22,147) (23,165)
Cash paid to subawardees (1,367) (1,010)
Cash paid to others (1,054) (1,634)
Cash paid to separated business unit (211) (1,260)
Net cash provided by/(used in) operating activities 3,126 (2,549)
Cash flows from investing activities
Purchases of endowment investments (13,769) (3,659)
Sales of endowment investments 522 1,541
Purchases of other investment assets (27) (102)
Sales of other investment assets 21 9
Investment income available for operations 1,631 4,740
Cash paid to acquire property, plant, and equipment (8,361) (4,722)
Cash paid to acquire other capital assets (113) (2)
Net cash used in investing activities (20,096) (2,195)
Cash flows from financing activities
Contributions and grants restricted or designated to endowment 14,580 3,404
Other cash receipts restricted or designated to endowment 16 34
Contributions and grants restricted for capital projects 5,762 10,412
Contributions to split interest agreements 27 102
Distributions from split interest agreements 73 141
Payments on capital leases (515) (718)
Net cash provided by financing activities 19,943 13,375
Net change in cash and cash equivalents 2,973 8,631
Cash and cash equivalents at beginning of year 32,471 23,840
Cash and cash equivalents at end of year 35,444$ 32,471$
Supplemental disclosure of cash flow information
Cash paid during the year for interest on capital leases 180$ 180$
Additions to property, plant, and equipment via capital leases ‐$ 11$
In‐kind additions to property, plant, and equipment ‐$ 373$
The accompanying notes are an integral part of these financial statements.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
7
NOTE 1 – ORGANIZATION
The Museum of Science (the “Museum”) is a private, non‐profit corporation chartered in 1831 as the Boston
Society of Natural History by a special act of the Legislature of the Commonwealth of Massachusetts. In 1968,
the legal name of the corporation was changed to Museum of Science by another special act of the Massachusetts
Legislature. The Museum is accredited by the American Alliance of Museums, the Association of Science‐
Technology Centers, and the Association of Zoos and Aquariums.
The Museum serves between 1.4 and 1.5 million on‐site visitors annually through informal science‐ and
technology‐related programs and exhibits, as well as large national and international audiences through
curriculum programs and networks with other formal and informal educational institutions.
NOTE 2 – ACCOUNTING POLICIES
The Museum prepares its financial statements on the accrual basis of accounting in accordance with generally
accepted accounting principles in the United States of America (“US GAAP”), which requires that the Museum
report information regarding its financial position and activities based on the existence or absence of donor
restriction. Accordingly, net assets and changes thereto are reported as follows:
Net assets without donor restrictions Net assets without donor restrictions are not subject to donor‐imposed stipulations. Support and revenues are
reported as increases in net assets without donor restrictions are unless use of the related assets is limited by
donor‐imposed restrictions or by law. Expenses are reported as decreases in net assets without donor
restrictions. Gains and losses on investments and other assets or liabilities are reported as increases or decreases
in net assets without donor restrictions unless their use is restricted by explicit donor stipulations or law.
Net assets without donor restrictions are divided into four categories:
Operating funds are funds with neither donor‐imposed restrictions nor board‐ or management‐
imposed limitations on use.
Designated funds are funds on which the Museum’s Board of Trustees or management has placed
purpose‐ or time‐related spending limitations. These funds include reserves and income generated by
quasi‐endowment funds (see Note 11).
Quasi‐endowment funds are funds designated to function as endowments by the Museum’s Board or
management (see Note 6).
Net investment in plant is the book value of the Museum’s capitalized assets, net of accumulated
depreciation and amortization, less outstanding liabilities on management agreements (see Note 8),
capital leases (see Note 10), asset retirement obligations (see below within this Note), and other
liabilities management considers capital‐related.
Net assets with donor restrictions Net assets with donor restrictions are subject to donor‐imposed stipulations restricting their use. These
stipulations may limit use to a particular purpose or until after the passage of a specified period of time, or both.
A time limitation may also be implied by the nature of the gift (e.g. gifts for capital projects, unconditional
promises to give to be paid in the future, or life income funds), or by interpretations of law (e.g. endowment
gains available for appropriation but not appropriated in the current period).
Net assets with donor restrictions include gifts, unconditional promises to give (pledges), trusts and remainder
interests, income, and gains which can be expended but for which a restriction has not yet been met. Expirations
of such restrictions, that is, the donor‐imposed purpose having been accomplished and/or the stipulated time
period having elapsed, are reported as net assets released from restrictions between the applicable classes of net
assets.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
8
Net assets with donor restrictions also include the historical dollar amount of gifts (including unconditional
promises to give), trusts and remainder interests and investment earnings required by donors to be maintained
in perpetuity.
Fair Value The Museum reports certain assets and liabilities at fair value on a recurring and non‐recurring basis depending
on the underlying accounting policy. Fair value is defined as the price that would be received or paid in the
most advantageous market on the measurement date. Recurring fair value measures include the Museum’s
investments and assets and liabilities of split interest agreements. Non‐recurring measures include pledges
receivable and asset retirement obligations. Fair value standards require an entity to maximize the use of
observable inputs (such as quoted market prices in active markets) and minimize the use of unobservable inputs
(such as appraisals or other valuation techniques) to determine fair value. In addition, the Museum measures
certain investments using the net asset value (“NAV”) per share (or its equivalent) as reported by its investment
managers under the so‐called “practical expedient” to reflect fair value. The practical expedient allows NAV per
share to represent fair value for reporting purposes when the criteria for using this method are met. Fair value
standards also require the Museum to classify its assets and liabilities into a three‐level hierarchy, based on the
priority of inputs used to value them, as discussed below, except for investments measured using the NAV
practical expedient, for which classification into the fair value hierarchy is not required.
Instruments measured and reported at fair value other than those using the NAV practical expedient are
classified and disclosed in one of the following categories:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Museum has the ability to access. Assets in this category generally
include mutual funds and listed equity and debt securities traded on an exchange.
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted
prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the same term as the
assets or liabilities.
Level 3 – Pricing inputs are unobservable for the instrument and/or include situations where there is
little, if any, market activity for the instrument. The inputs into the determination of fair value require
significant management judgement or estimation.
In some instances, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.
In such instances, an instrument’s level within the hierarchy is based on the lowest level of input that is
significant to the fair value measurement.
Market price is affected by a number of factors, including the type of instrument and the characteristics specific
to the instrument. Instruments with readily available active quoted prices or for which fair value can be
measured from actively quoted prices generally will have a higher degree of market price observable inputs and
a lesser degree of judgment used in measuring fair value. It is reasonably possible that change in values of these
instruments will occur in the near term and that such changes could materially affect amounts reported in these
financial statements.
Cash and Cash Equivalents Cash and cash equivalents consist of cash, money market funds, and certificates of deposit with a maturity of
ninety days or less when acquired. Bank deposits are often in excess of federally insured limits. However,
management monitors the credit standing of its banking partners and has not experienced any losses on such
accounts. Cash and cash equivalents are reported at cost plus accrued interest.
Cash and cash equivalents held by investment managers are considered part of investments.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
9
Pledges Receivable Unconditional promises to give are recognized as revenues in the period committed, offset by a corresponding
pledge receivable. Amounts are initially recorded at fair value based on present value using a bond‐based
discount rate applied over the collection period of the pledge. Annual amortization of the discount is recorded
as additional contribution revenue in accordance with donor restrictions, if any, on the contributions.
A risk‐based allowance for uncollectible pledges is maintained by adjusting revenue recognized. Management
assesses risk based on prior performance and circumstances associated with each pledge. Uncollectible amounts
are written off against this allowance, with any excess charged to bad debt expense. A pledge is considered
uncollectible when the donor formally renounces the promise or when management deems all reasonable
collection efforts have been exhausted.
The initially recorded fair value of a pledge and the allowance for uncollectible pledges are considered Level 2
measurements.
Investments Investments are carried at fair value. Investments associated with the Museum’s endowment are pooled, with
net investment returns and losses being allocated proportionally among the individual funds making up the
endowment.
Net investments return (loss) is reported in the statements of activities and consists of interest and dividend
income, realized and unrealized capital gains and losses, less external and direct internal investment expenses.
Assets and Liabilities under Split Interest Agreements Assets and liabilities under split‐interest agreements are recorded at fair value and in the appropriate net asset
category based on donor stipulation. Revenue related to these agreements is recognized as a contribution equal
to the present value of expected future benefits. Agreements for which the Museum is not the trustee are
recorded as assets net of the associated liability, while agreements for which the Museum holds the assets are
recorded in two parts, with the asset at fair value and the associated liability reported as liability under split
interest agreements.
During the term of these agreements, changes in the value of split interest agreements are recognized in the
statement of activities based on accretion of the discounted amount of the contribution and reevaluations of the
expected future benefits to be received by the Museum given life expectancies and other factors. The initially
recorded fair value of the donated investments is determined based on the nature of the investment received,
and generally represent Level 1 measurements, while the initial measurement of the related obligations Level 3,
given life expectancy and other factors used in determining the effect of these obligations on measurement.
Property, Plant, and Equipment Property, plant and equipment are assets with a useful life of greater than one year and an initial value of greater
than a management‐established capitalization threshold. Value is stated at cost, or, in the case of donated assets,
fair value at the date of donation. The level of the fair value measurement depends on the nature of the donated
asset. Betterments which materially add to the value of the related assets or materially extend the useful life of
the assets are capitalized. Normal replacements and minor equipment purchases are included as operating
expenses. The Museum capitalizes the cost of standing exhibits and traveling exhibits produced by the Museum
for rent by other institutions. The cost of hosted traveling exhibitions produced by others and other short‐term
exhibits are expensed as incurred.
Depreciation is recorded on the straight‐line basis over the following estimated useful lives:
Building and improvements 10 – 40 years
Equipment 03 – 20 years
Exhibits 05 – 40 years
Certain extraordinary exhibit components, such as fossils, are considered inexhaustible assets with an indefinite
useful life and are therefore not depreciated.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
10
Museum Collections and Archives The Museum’s collections consist of approximately 30,000 artifacts used primarily for educational activities
encompassing interpretations, discovery spaces, exhibits, lectures, classes, demonstrations, reference services, or
other programs. The Museum also has a historical and archival collection that documents the history of the
institution.
The composition of the Museum’s collections by artifact type is as follows:
Natural Sciences 20,000 items
Cultural/Physical Science 05,000 items
Artwork 02,000 items
Institutional History 03,000 items
Archives 01,100 linear feet
The Museum’s Collections Management Policy stipulates that the Museum will only acquire objects useful in
fulfilling the educational purpose stated in its mission. The Museum accepts only those objects that can be
immediately put on display in an exhibit, used in educational programs, or used in future programming.
Items may be de‐accessioned from the collections if they are determined to be no longer useful or relevant in
assisting the Museum in fulfilling its mission. Consistent with the American Alliance of Museums’ Code of
Ethics, Museum policy specifies that proceeds from the de‐accessioning of an item may only be used for the
conservation or acquisition of other collections items.
In accordance with current practice generally followed by museums, collections are generally not recorded as
assets in the accompanying financial statements. Purchased additions to the collections are recorded as expenses
at the time acquired. Although artifacts from the collections may from time to time be incorporated into exhibits,
the Museum’s exhibits themselves are not considered part of its collections, and may be capitalized under the
Museum’s property, plant, and equipment policies. However, artifacts and artworks with a value of $250,000 or
greater acquired specifically for incorporation into an exhibit and capitalized as part of that exhibit may be
formally accessioned into the Museum’s collections in order to be afforded the protections of the Museum’s
Collections Management Policy.
Asset Retirement Obligation The Museum recognizes the initial fair value of a liability for legal obligations associated with asset retirements
in the period in which the obligation is incurred. When the liability is initially recorded, the cost of the asset
retirement obligation is capitalized by increasing the carrying amount of the related long‐lived asset. This is
considered a Level 2 fair value measurement. The liability is accreted to its present value each period, and the
capitalized cost associated with the retirement obligation is depreciated over the useful life of the related asset.
The asset retirement obligations will be adjusted on an ongoing basis due to the passage of time, new laws and
regulations and revisions to either the timing or amounts of original estimates. Upon settlement of the
obligation, any difference between the cost to settle the asset retirement obligation and the liability recorded is
recognized as a gain or loss in the statement of activities.
Contributions and Other Supporting Income
Contributions, grants, and pledges consists of unconditional, non‐reciprocal support provided by individuals,
corporations, foundations, and other private parties. Contributions are recorded as support with or without
donor restriction depending on the existence and nature of any donor restrictions.
Contributions, including unconditional promises to give (pledges), are recognized as revenues in the period
committed. Conditional promises to give are not recognized until such time as the conditions on which they
depend are substantially met. Intentions to give which are not legally enforceable are recorded when the gift is
received.
Contributions of financial assets other than cash are recorded at their estimated fair value when originally
pledged or donated. The initially recorded fair value is generally considered a Level 1 or Level 2 measurement
depending on the nature of the donated asset.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
11
Contributed services and gifts‐in‐kind consists of donations of goods or services. Donated materials are
recorded at their estimated fair values at the time of receipt. Donated services are recognized when services are
performed which would otherwise have been purchased externally or performed by Museum personnel, and are
recorded at the estimated amount the Museum would have paid for their performance. Fair value determination
of these contributions is generally a Level 1 or Level 2 measurement depending on the nature of the donated
goods or services.
Government grants consists of federal, state, and international government funds awarded in support of the
Museum’s exhibits and programs, and is recorded as revenue as expenditures are made for the supported
activities. Government grants received in support of the Museum’s general operations are recorded as revenue
when received.
Recognition of Earned Revenue and Deferred Revenue
Admissions consists of fees paid for entrance to the Museum’s exhibit halls, theaters, and special attractions, and
is recorded as revenue on the date of visit.
Membership consists of fees paid for household, library, and corporate memberships, and is recorded
proportionally over the period of the membership.
Educational programs includes revenue received for the Museum’s overnights program, courses, traveling and
outreach programs, professional development, rental of traveling exhibits, and sale of curriculum materials.
These fees are recorded at the time the related service is provided.
Ancillary services includes income derived from the Museum’s events and conference services and garage, and
rental income associated with the operation of outsourced food services and retail store. This revenue is
recorded on the date the related service is provided.
Other income includes facility rental income, fund‐raising and other event ticket sales, and corporate
sponsorships. Sponsorship agreements provide for the sponsors’ name and/or logo to be displayed on Museum
signage, exhibits, advertising, and website, and also provide certain admission and event privileges.
Sponsorship revenue is recognized proportionally over the term of the sponsorship agreement. The remaining
components of other income are recognized as the related services are provided.
In accordance with these revenue recognition policies, prepayments and deposits are recorded as deferred
revenue until the corresponding revenue recognition processes are complete.
Transfers Transfers include the redesignation of non‐endowment funds to endowment, either per donor stipulations that
unused endowment income revert to principal at year‐end, or as part of fund‐raising programs whereby funds
raised in excess of a capital project’s needs are to be used to create an endowment to support the ongoing
operations or maintenance of the funded assets.
Income and Other Taxes The Museum is exempt from income taxation on activities related to its charitable purposes under the provisions
of Section 501(c)(3) of the Internal Revenue Code and is qualified to receive tax‐deductible gifts and bequests
under the U.S. tax code. The Museum is subject to tax on income from any business it conducts which is
unrelated to its charitable purposes. These activities generally include event and conference services revenue for
events of a purely social nature, rental income from parking spaces in the Museum’s garage, investment income
from certain endowment investments, and ticket income from non‐scientific offerings in the Museum’s
planetarium and Omni theater. Taxes paid for these activities are recorded in the accompanying financial
statements as expenses of the department generating the associated unrelated income.
The Museum accounts for the effect of any uncertain tax positions on the basis of whether it is more likely than
not that positions taken, or expected to be taken, in a tax return will be sustained upon examination by the
relevant taxing authority. If a tax position or positions are deemed to result in uncertainties of those positions,
the unrecognized tax benefit is estimated based on a “cumulative probability assessment” that aggregates the
estimated liability for all uncertain tax positions. The Museum considers its status as a tax‐exempt entity and the
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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determination of income as related or unrelated to its exempt purpose to be its only significant income tax
positions, and has determined that such positions do not result in an uncertainty requiring recognition. The
Museum is not currently under income tax examination by any jurisdiction. The Museum’s Federal and state tax
returns are generally open for examination for three years following the date filed.
The Museum is also responsible for calculating, collecting, and remitting sales and liquor taxes in various
jurisdictions.
Allocation of Expenses Certain expenses and losses incurred by supporting services, such as interest, depreciation, amortization, and
loss on disposal of capital assets, are allocated in the financial statements to the program and supporting
functions benefitting from the use of the assets with which each expense or loss was associated. Expenses
associated with assets used by the Museum as a whole remain reported under facility operations.
Use of Accounting Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates. Significant management estimates
included in the accompanying financial statements relate to allowances for doubtful accounts and pledges
receivable, present value factors used for pledges, fair values of certain investments, capitalization of assets,
useful lives of depreciable and amortizable assets, asset and liability values associated with leased equipment,
obligations under annuity and split‐interest arrangements, liabilities associated with asset retirement obligations,
and allocation of indirect costs, employee fringe benefits and other common expenses.
Reclassifications Certain reclassifications have been made to the prior year financial statements in order to conform with the
current year presentation.
New Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‐14,
Not‐for‐Profit Entities (Topic 958) – Presentation of Financial Statements of Not‐for‐Profit Entities. The update
addresses the complexity and understandability of net asset classification, deficiencies in information about
liquidity and availability of resources, and the lack of consistency in the type of information provided about
expenses and investment return. The Museum has adopted ASU 2016‐14 and has adjusted the presentation of
these financial statements accordingly.
The Museum has also adopted Accounting Standards Update No. 2018‐08, Not‐for‐Profit Entities (Topic 958) –
Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, which addresses
inconsistency in revenue recognition with respect to when an item should be considered a contribution or an
exchange type transaction. Exchanges would be accounted for using the revenue recognition standards above.
The update also provides guidance as to when a contribution should be considered conditional which, for
example, the case is often when funds are received under federal grants and contracts. Conditional
contributions have different revenue recognition when compared to non‐reciprocal transfers of resources in that
amounts are reflected as earned when barriers to entitlement are overcome with any difference being deferred or
a receivable as applicable.
In accordance with ASU 2018‐08, the Museum has adjusted its accounting for and presentation of government
awards as non‐reciprocal contributions.
The contribution standards were applied retrospectively. The impact related to the adopting of the new
standard did not have material impact on 2019 results. In evaluating the effects of the change, contributions in
process as of the date of adoption were considered.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 3 – LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS
The Museum’s financial assets available for general expenditures within one year are as follows:
(in thousands) Without With
Donor Donor
Restrictions Restrictions Total
Cash and cash equivalents 1,937$ 7,400$ 9,337$
Accounts receivable 2,484 1,129 3,613
Pledges due within one year ‐ 1,452 1,452
Contributions with time restrictions
due to expire within one year 181 ‐ 181
Expected appropriations from
endowment per allocation policy 2,332 4,053 6,385
Financial assets available for general
expenditures within one year 6,934$ 14,034$ 20,968$
A large portion of the Museum’s ongoing operations are normally funded through donor‐restricted
contributions and endowment income. The Museum accordingly considers such funds in its analysis of its
liquidity and in its short‐ and long‐term planning. Funds restricted for capital projects or projects or programs
not undertaken on an ongoing basis are not considered available for general expenditures.
As part of its liquidity management, the Museum has a policy to structure its financial assets to be available as its
general expenditures, liabilities, and other obligations come due. The Museum invests cash in excess of daily
requirements in certificates of deposits and other liquid assets. These amounts are reported as cash and cash
equivalents.
The Museum’s quasi‐endowment totaled $10,287,000 as of June 30, 2019. Due to legal, donor relations, and other
considerations, the Museum considers $5,440,000 to be available to meet general or special purpose expenditures
if necessary.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 4 – PLEDGES RECEIVABLE
Pledges are expected to be realized in the following time frame as of June 30:
(in thousands) 2019 2018
In one year or less 5,152$ 5,215$
Between one and five years 1,398 2,468
Greater than five years 20 30
Less allowance for unfulfilled pledges (65) (79)
Less discount to present value (68) (87)
Net present value of pledges receivable, net of allowances 6,437$ 7,547$
Net present value of pledges by purpose are as follows as of June 30:
(in thousands) 2019 2018
Purpose Restrictions
Operating and similar funds
Exhibits 507$ 1,179$
Education and outreach programs 380 588
Teacher and curriculum programs 303 594
Other program activities 108 161
General and other 177 416
Capital exhibits, property, plant, and equipment 2,000 1,452
Total operating and similar funds 3,475 4,390
Endowment and quasi‐endowment
Education and outreach programs 3,000 3,082
Total endowment and quasi‐endowment 3,000 3,082
Unrestricted pledges with effective time restrictions 27 154
Less allowance for unfulfilled pledges (65) (79)
Net present value of pledges receivable, net of allowances 6,437$ 7,547$
Concentration of Risk Pledges from three and two major donors accounted for 87% and 85% of gross pledges as of June 30, 2019 and
2018, respectively.
Conditional Promises to Give The Museum had $250,000 and $19,250,000 in conditional private pledges as of June 30, 2019 and 2018,
respectively. These promises are not recorded in the financial statements. The Museum also treats government
grants awarded but not yet spent as conditional promises. These are disclosed in Note 13.
Non-binding Intentions In addition to enforceable promises to give, the Museum has received promises that an individual will
recommend that a gift be made from a donor‐advised fund or a foundation over which the individual does not
have control. As donor‐advised funds and foundations are not legally bound to honor such recommendations,
these promises are not recorded in the financial statements. Any gifts resulting from these recommendations are
recorded as contributions when received. The Museum had $1,001,000 and $1,671,000 in outstanding non‐
binding intentions as of June 30, 2019 and 2018, respectively.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 5 – INVESTMENTS AND ASSETS OF SPLIT INTEREST AGREEMENTS
The Museum’s investments include both its endowment and miscellaneous non‐endowment holdings.
Investments and assets of split interest agreements were as follows at June 30:
(in thousands)
Investments Investments
measuring Quoted measuring Quoted
fair value prices Significant fair value prices Significant
using net in active unobservable using net in active unobservable
asset value markets inputs Total fair asset value markets inputs Total fair
per share (Level 1) (Level 3) value per share (Level 1) (Level 3) value
Investments
Cash and cash equivalents 3,159$ 3,159$ 11,102$ 11,102$
Mutual funds 30,296 30,296 29,649 29,649
Exchange‐traded funds 6,115 6,115 ‐ ‐
Commingled trust funds 25,160$ ‐ 25,160 25,953$ ‐ 25,953
Equity hedge funds 48,926 ‐ 48,926 39,926 ‐ 39,926
Hedge fund of funds 13,914 ‐ 13,914 13,576 ‐ 13,576
Private investments 24,275 ‐ 24,275 16,418 ‐ 16,418
Other alternative investments 28,628 ‐ 144$ 28,772 24,171 ‐ 166$ 24,337
Total investments 140,903$ 39,570$ 144$ 180,617$ 120,044$ 40,751$ 166$ 160,961$
Assets of split interest agreements
Internally managed 2,740$ 2,740$ 2,862$ 2,862$
Administered by external trustees 359 14,577$ 14,936 363 13,310$ 13,673
Total assets of split interest
agreements 3,099$ 14,577$ 17,676$ 3,225$ 13,310$ 16,535$
2019 2018
Included in Level 3 are interests in split‐interest agreements of which the Museum is not the trustee. The fair
value consists of market values of assets held as reported by the trustees, net of the present value of the
distributions expected to be paid to the income beneficiaries during their lives. Market price data is generally
available for the assets held by these trusts, however the actuarial assumptions relating to the income
beneficiaries renders final measurement less observable.
Liquidity The liquidity of the Museum’s investments is as follows at June 30:
Redemption Frequency 2019 2018
Daily 39,571$ 21.9% 40,751$ 25.3%
Weekly 4,831 2.7% 5,072 3.2%
Monthly 53,315 29.5% 50,118 31.1%
Quarterly 36,177 20.0% 31,271 19.4%
Quarterly or more frequently 133,894 74.1% 127,212 79.0%
Semi‐annually 3,486 1.9% 524 0.3%
Annually 6,044 3.3% 3,918 2.4%
Less frequently than annually 14,014 7.7% 12,874 8.0%
Illiquid 23,179 13.0% 16,433 10.3%
Total investments 180,617$ 100.0% 160,961$ 100.0%
Fair value (in thousands)
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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Management has no intentions or plans to liquidate any fund for which NAV per share is used to measure fair
value at other than NAV per share.
Unfunded commitments totaled $25,220,000 as of June 30, 2019.
Some investment managers reserve the right under unusual circumstances to suspend withdrawals
notwithstanding the redemption frequencies noted above; however, none of the Museum’s managers has
exercised those rights for the two years ended June 30, 2019 and 2018.
The Museum considers activity related to investment and split interest assets for which Level 3 inputs are used
to determine fair value to have been insignificant for the two years ended June 30, 2019 and 2018.
NOTE 6 – ENDOWMENT
The Museum’s endowment includes both donor‐restricted endowment funds and funds designated by the Board
of Trustees to function as endowments (“quasi‐endowments”). The endowment consists of 119 individual
donor‐restricted endowment funds and 28 quasi‐endowment funds established for a variety of purposes. The
net assets associated with endowment funds including quasi‐endowments, are classified and reported based on
the existence or absence of donor imposed restrictions. The endowment accounted for $171,786,000 and
$156,367,000 of the Museum’s investments at June 30, 2019 and 2018.
In 2019 and 2018, the Museum liquidated $522,000 and $610,000, respectively, of its board‐designated quasi‐
endowment to fund marketing, advancement, and facility projects associated with its long range plan. In 2018,
the Museum also liquidated $931,000 of its quasi‐endowment and transferred the funds to the newly separated
Clubhouse Network as part of its obligations under the separation agreement (see Note 14).
The Museum follows the “Uniform Prudent Management of Institutional Funds Act” (“UPMIFA”) as
promulgated in Massachusetts. The Board of Trustees of the Museum has interpreted UPMIFA as requiring the
preservation of the original gift as of the gift date of the donor‐restricted endowment funds absent explicit donor
stipulations to the contrary. For the purposes of this interpretation, the Museum considers the “original gift” to
consist of: (a) the original value of gifts donated to the permanent endowment, (b) the original value of
subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in
accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to
the fund. Appreciation in excess of the original gift is subject to appropriation for expenditure by the Museum in
a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the
Museum considers the following factors in making a determination to appropriate or accumulate endowment
funds:
1) The duration and preservation of the fund
2) The purposes of the Museum and the donor‐restricted endowment fund
3) General economic conditions
4) The possible effect of inflation and deflation
5) The expected total return from income and the appreciation of investments
6) Other resources of the Museum
7) The investment policies of the Museum.
Both the original gift and any appreciation are classified as net assets with donor restriction. Amounts
appropriated for expenditure are classified as net assets with donor restriction if the donor has stipulated a
purpose limitation on the uses of the fund, and deemed released from restriction when that purpose is
accomplished. Amounts appropriated for expenditure for which the donor has not stipulated a purpose are
recognized as revenue increasing net assets without donor restriction.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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Endowment funds segregated by net asset class are as follows at June 30:
(in thousands)
Without With Without With
Donor Donor Donor Donor
Restrictions Restrictions Total Restrictions Restrictions Total
Donor‐restricted funds 157,526$ 157,526$ 141,956$ 141,956$
Board‐designated funds 10,287$ 3,973 14,260 10,465$ 3,946 14,411
Total endowment net assets 10,287$ 161,499$ 171,786$ 10,465$ 145,902$ 156,367$
20182019
The following schedule summarizes the change in endowment net assets for the years ended June 30:
(in thousands)
Without With Without With
Donor Donor Donor Donor
Restrictions Restrictions Total Restrictions Restrictions Total
Endowment net assets, beginning of year 10,465$ 145,902$ 156,367$ 11,184$ 135,143$ 146,327$
Additions to corpus
Contributions 145 13,472 13,617 99 3,305 3,404
Other 120 44 164 165 87 252
Investment return, net 727 7,333 8,060 1,165 12,227 13,392
Endowment income per spending policy (648) (5,252) (5,900) (607) (4,860) (5,467)
Other changes:
Liquidation for long range plan (522) ‐ (522) (610) ‐ (610)
Liquidation for separation of business unit ‐ ‐ ‐ (931) ‐ (931)
Endowment net assets, end of year 10,287$ 161,499$ 171,786$ 10,465$ 145,902$ 156,367$
2019 2018
Endowment Funds with Deficits (i.e. Underwater funds) From time to time, the fair value of assets associated with individual donor‐restricted endowment funds may fall
below the value of the original donor gift amounts. There were no such deficits as of June 30, 2019 and 2018.
In order to preserve the original gift in accordance with the Board’s interpretation of UPMIFA, the Museum does
not appropriate for expenditure that portion of a fund which represents the value of the initial and subsequent
gift amounts. For individual donor‐restricted endowment funds, the Museum’s Spending Allocation Policy (see
below) is suspended during any month when such appropriation would leave that fund in deficit, and only
current period interest and dividend income is allocated for spending.
Return Objectives and Risk Parameters The Museum has adopted endowment investment and spending policies that aim to provide a predictable
stream of funding to programs supported by the endowment while maintaining the purchasing power of
endowment assets. Under this policy, the return objective for the endowment assets, measured over a full
market cycle, is to maximize the return against a blended index, based on the endowment’s target asset
allocation applied to the appropriate individual benchmarks.
Strategies Employed for Achieving Investment Objectives To achieve its long‐term rate of return objectives, the Museum relies on a total return strategy in which
investment returns are achieved through both capital appreciation (realized and unrealized gains) and current
yield (interest and dividends). The Museum targets a diversified asset allocation that places greater emphasis on
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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investments whose underlying holdings are equity‐based to achieve its long‐term objectives within prudent risk
constraints.
Endowment Spending Allocation Policy and Relationship to Investment Objectives The Museum’s spending allocation policy is to appropriate for expenditure an amount of up to 4.75% of the
16‐quarter moving average of the fair value of the endowment as measured at the December 31 preceding the
fiscal year in which the distribution is planned. On a monthly basis, one twelfth of the predetermined annual
amount is allocated among the individual endowment funds on the basis of each fund’s fair value as compared
to that of the pool as a whole. Donor‐restricted funds with deficits in any month are excepted from this policy
during that month and allocated only their share of interest and dividend income received. In establishing this
policy, the Board considered the expected long term rate of return on its endowment. Accordingly, over the long
term, the Museum expects its current asset allocation policy to provide sufficient endowment growth to fund its
spending policy and also maintain the purchasing power of the endowment assets. The asset allocation and
spending policies are reviewed periodically and may be adjusted as necessary to meet these objectives.
Under the base spending allocation policy, new large gifts may have a distorting effect on the allocation of
income to existing funds until those gifts are fully absorbed into the lookback period. Therefore, the Board
reserves the right to exempt unusually large endowment additions from the standard procedure and subject
those gifts to a separate allocation policy. When it does so, the Board will seek to approximate the allocation rate
applied to the main endowment, while protecting the future earning power of the exempted fund. Funds with
special allocation policies may be migrated back into the standard policy at such time as the effect on other funds
of doing so is negligible.
Between October 2016 and August 2018, the Museum received an endowment gift of unprecedented size, and
has chosen to exempt this gift from the standard income allocation policy. The Museum instead applies a fund‐
specific policy, agreed to by the donor, which calls for increasing predetermined annual appropriation amounts
until June 2024, after which each fiscal year’s appropriation is to be 4 percent of the 20 quarter moving average of
the fair value of the fund as measured at the preceding December 31.
In accordance with its standard and special income allocation policies, the Museum intends to appropriate
approximately $6,385,000 during the year beginning July 1, 2019. This appropriation is expected to be funded
from liquidity normally maintained within the portfolio.
The establishing documents for the majority of the Museum’s donor‐restricted endowment funds contain
provisions which allow the Museum to accumulate and carry forward amounts allocated but not spent during
the fiscal year. This practice allows the Museum to undertake projects for which a single year’s allocation would
provide insufficient funds.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 7 – PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consist of the following at June 30:
11 12
(in thousands) 2019 2018
Building and improvements 90,836$ 88,056$
Equipment 34,837 35,560
Exhibits 45,000 43,581
Total before depreciation 170,673 167,197
Accumulated depreciation (103,688) (98,867)
Net 66,985$ 68,330$
Capital additions were $7,936,000 and $5,110,000 for the years ended June 30, 2019 and 2018, respectively.
Depreciation expense amounted to $8,561,000 and $8,768,000 for the years ended June 30, 2019 and 2018,
respectively.
The Museum’s total expenditures for constructing, hosting, and refurbishing exhibits were as follows for the
years ended June 30:
(in thousands) 2019 2018
Traveling exhibitions, shorter duration exhibits,
and refurbishment costs charged to operations 1,736$ 2,110$
Standing exhibits added to property, plant, and equipment 2,754 1,628
4,490$ 3,738$
The Museum has a 99‐year lease with the Massachusetts Department of Conservation and Recreation for the
land occupied by the Museum’s buildings. The lease calls for payment of $1 per year over the term of the lease
and expires on December 1, 2047, with an option to renew for another 99 years under the same terms and
conditions as the original lease. Management does not assign a value to this agreement due to the nature of the
parcel at the time the Museum entered into the agreement. Therefore no value is recorded on the statement of
financial position, nor is any contribution recognized on the statement of activities.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 8 – MANAGEMENT AGREEMENTS AND OTHER VENDOR CONTRACTS
The Museum has contracted with an outside vendor to operate its food services. This contract expires in 2020
and is cancelable with notice. The vendor has made capital improvements totaling $4,056,000 associated with
the food service facilities, with these outlays being amortized on a straight‐line basis over a 20‐year schedule.
Should the Museum terminate the agreement, it is obligated to pay the vendor the unamortized balance of the
liability under management agreement, which was $1,179,000 and $1,385,000, as of June 30, 2019 and 2018,
respectively. The current portion of $205,000 is reflected in accounts payable and accrued liabilities each year.
The Museum has also contracted with an outside vendor to operate its gift shop. This contract expires in 2020.
Both agreements provide for minimum annual rental payments to the Museum, with additional amounts due
based on each vendor’s revenue. The combined minimum rent due each year under these contracts is $1,825,000.
Total actual revenue realized was $2,285,000 and $2,242,000 for the years ended June 30, 2019 and 2018,
respectively, which is included in ancillary services and other income.
In 2014, the Museum entered into a contract with a movie studio to develop a large traveling exhibition. The
agreement licenses the Museum to use intellectual property and custom‐developed materials for a period of 10
years. In 2017, the Museum entered into another contract with the same studio to produce a second copy of the
exhibit under similar terms. The two exhibits are on tour nationally and internationally and are expected to be
rented to 3‐5 institutions per year over the course of the license period, with the expectation that such rentals will
cover the initial investment and generate additional revenue for future projects.
NOTE 9 – ANNUITY PAYABLE, DEFERRED COMPENSATION, AND BENEFIT PLANS
The Museum has an annuity agreement with a related party individual which provides for fixed annual
payments for life. Using standard actuarial methods and life tables, management has estimated the net present
value of this obligation as $209,000 and $219,000 at June 30, 2019 and 2018, respectively. Of these amounts, the
current portion of $45,000 is included in accounts payable and accrued expenses each year.
In addition, the Museum has a non‐qualified deferred compensation plan under section 457 of the Internal
Revenue Code covering certain employees. Assets associated with this plan in the amount of $978,000 and
$863,000 at June 30, 2019 and 2018, respectively, are included in other assets, with the corresponding obligation
to the employees included in deferred compensation. The Museum contributed $26,000 and $48,000 for the years
ended June 30, 2019 and 2018, respectively, to the 457 plan.
The Museum has two defined contribution plans for the benefit of its employees: a 403(b) savings plan (“the
Savings Plan”) and a 401(a) retirement plan (“the Retirement Plan”).
The Savings Plan allows employees to defer a percentage of their compensation on a pre‐ or post‐tax basis (or
both) subject to IRS limits. All employees are eligible to participate in the Savings Plan. All employees, except
interns, are automatically enrolled in the Savings Plan on the first day of the month following their date of hire at
a rate of 3% of the employee’s compensation, and employees may cease or resume participation at any time.
The Museum contributes between 2.25% and 4.5% (depending on age) of eligible employees’ compensation to
the Retirement Plan. These percentages are subject to annual review and may be changed at the discretion of the
Museum’s management. In addition, the Retirement Plan provides a match of up to 50% of the first 6% of an
employeeʹs contributions to the Savings Plan. Employees scheduled to work at least 17.5 hours per week who
have completed one year of service are automatically enrolled in the Retirement Plan. Vesting provisions for
Retirement Plan vary according to length of service.
Expenses for the Retirement Plan were $1,173,000 and $1,187,000 for the years ended June 30, 2019 and 2018,
respectively. The Museum does not make contributions to the Savings Plan.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 10 – LEASES
The Museum leases energy conservation, office, 4‐D theater, and other equipment under capital leases that
expire at various dates through July, 2024.
The 4‐D theater equipment lease agreement also includes the provision of programs, supplies, and maintenance
services for the theater. The portion of the annual payments representing those items are expensed in the year
paid.
Future minimum payments under lease agreements are as follows at June 30, 2019:
(in thousands) Capital 4‐D programs
leases and services
2020 547$ 337$
2021 540 350
2022 527 363
2023 520 376
2024 511 391
After 2024 43 33
Total minimum lease payments 2,688 1,850$
Interest (352)
Present value of net minimum lease payments 2,336
(426)
Unamortized debt issuance costs (11)
Net long term obligations under capital leases 1,899$
in accounts payable and accrued liabilities
Current portion of capital lease obligations included
The net book value of assets acquired under capital leases was $2,039,000 and $2,987,000 as of June 30, 2019 and
2018, respectively.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 11 – NET ASSETS
Net asset balances by donor restriction or internally designated purpose are as follows as of June 30:
(in thousands)
Without With Without With
Donor Donor Donor Donor
Restrictions Restrictions Total Restrictions Restrictions Total
Operating funds, gifts and grants, and
endowment income available for spending
Exhibits 327$ 12,138 12,465$ (386)$ 10,140$ 9,754$
Education and outreach programs 123 11,461 11,584 185 5,683 5,868
Teacher and curriculum programs 99 3,817 3,916 1,102 3,733 4,835
Visitor and member services ‐ 7 7 ‐ 7 7
Other program activites 9 579 588 4 716 720
Supporting services 342 396 738 883 730 1,613
Property, plant, and equipment 98 10,451 10,549 (129) 8,270 8,141
Total operating and similar funds 998 38,849 39,847 1,659 29,279 30,938
Endowment and quasi‐endowment corpus and
accumulated gains not allocated for spending
Exhibits 6,437 54,617 61,054 6,385 53,702 60,087
Education and outreach programs 2,404 77,530 79,934 2,388 63,095 65,483
Teacher and curriculum programs 479 1,335 1,814 476 1,294 1,770
Visitor and member services ‐ 55 55 ‐ 55 55
Other program activites 804 2,907 3,711 783 2,993 3,776
Supporting services 163 25,055 25,218 433 24,763 25,196
Total endowment and quasi‐endowment 10,287 161,499 171,786 10,465 145,902 156,367
Other net assets
Carrying value of capital exhibits,
property, plant, and equipment 62,007 ‐ 62,007 62,771 ‐ 62,771
Split interest agreements ‐ 16,219 16,219 ‐ 15,012 15,012
Total other net assets 62,007 16,219 78,226 62,771 15,012 77,783
Pledges receivable ‐ 6,437 6,437 ‐ 7,547 7,547
Total net assets 73,292$ 223,004$ 296,296$ 74,895$ 197,740$ 272,635$
2019 2018
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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Net assets released from restriction Net assets with donor restrictions are released from those restrictions when expenses are incurred to satisfy the
restricted purposes or by the occurrence of other events specified by the donors or implied by the nature of the
gift. Net assets were released from restriction as follows for the years ended June 30:
(in thousands) 2019 2018
Net assets released due to fulfillment
of purpose restrictions
Releases funding operations
Exhibits 3,307$ 4,044$
Education and outreach programs 3,635 3,940
Teacher and curriculum programs 2,123 1,732
Visitor and member services 205 100
Other program activites 769 1,033
Administration and general 146 108
Facility operations 28 14
Marketing 137 5
Fundraising 363 157
Total operating releases 10,713 11,133
Releases funding capital projects
Capital exhibits 2,773 1,803
Other property, plant, and equipment 3,674 1,204
Total capital releases 6,447 3,007
Total releases from purpose restrictions 17,160 14,546
Net assets released due to expiration
of time restrictions
Releases to operations 261 476
Releases to designated funds and reserves 127 222
Releases to quasi‐endowment 89 150
Total releases from time restrictions 477 848
Total net assets released from restriction 17,637$ 14,988$
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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Board designated net assets The Museum’s Board of Trustees has established reserve, quasi‐endowment, and other designated funds using
net assets without donor restriction in order to meet the Museum’s long‐term needs. The Board has authorized
management to make certain decisions regarding additions to and removals from these funds, while reserving
other decisions to itself.
The Museum also treats special‐purpose private contract revenue as board‐designated funds to facilitate tracking
income and expenses. Contract revenue received for the Museum’s normal business is treated a general
operating revenue.
Board policy directs that bequests and distributions from trusts under will without donor restriction be added to
the quasi‐endowment, with income appropriated therefrom allocated to general operations.
Activity on board‐designated funds was as follows for the years ended June 30, 2019 and 2018:
(in thousands)
Quasi‐ Quasi‐
endowment Other endowment Total
Reserves income designated Total corpus designated
Net assets as of 6/30/17 2,437$ 471$ 617$ 3,525$ 11,184$ 14,709$
Contributions 167 ‐ 13 180 99 279
Revenue designated per board or management policy 2,293 ‐ 268 2,561 15 2,576
Designated endowment and quasi‐endowment income (91) 432 535 876 ‐ 876
Net assets released from restriction 256 ‐ 131 387 150 537
Transfers from operating fund 1,099 ‐ 103 1,202 ‐ 1,202
Additions to designated funds 3,724 432 1,050 5,206 264 5,470
Funding of operations (4,073) (441) (1,152) (5,666) ‐ (5,666)
Funding of long‐range plan ‐ ‐ ‐ ‐ (610) (610)
Funding of capital projects (1,610) (7) (120) (1,737) ‐ (1,737)
Uses of designated funds (5,683) (448) (1,272) (7,403) (610) (8,013)
Other transfers 12 ‐ (12) ‐ ‐ ‐
Investment earnings, net of endowment income per policy ‐ ‐ ‐ ‐ 558 558
Liquidation for business unit separation ‐ (18) (69) (87) (931) (1,018)
Net assets as of 6/30/18 490 437 314 1,241 10,465 11,706
Contributions 37 ‐ 159 196 145 341
Revenue designated per board or management policy 2,091 ‐ 421 2,512 16 2,528
Designated endowment and quasi‐endowment income (69) 420 786 1,137 ‐ 1,137
Net assets released from restriction ‐ ‐ 127 127 89 216
Transfers from operating fund 3,075 ‐ 63 3,138 ‐ 3,138
Additions to designated funds 5,134 420 1,556 7,110 250 7,360
Funding of operations (4,241) (325) (1,318) (5,884) ‐ (5,884)
Funding of long‐range plan ‐ ‐ ‐ ‐ (522) (522)
Funding of capital projects (1,375) (1) (144) (1,520) ‐ (1,520)
Uses of designated funds (5,616) (326) (1,462) (7,404) (522) (7,926)
Other transfers ‐ (15) ‐ (15) 15 ‐
Investment earnings, net of endowment income per policy ‐ ‐ ‐ ‐ 79 79
Net assets as of 6/30/19 8$ 516$ 408$ 932$ 10,287$ 11,219$
Designated operating funds
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 12 – CONTRIBUTED SERVICES AND GIFTS IN KIND
Contributed services and gifts in kind were as follows for the years ended June 30:
(in thousands) 2019 2018
Pro bono outside services:
Legal 460$ 510$
Marketing 655 1,201
Miscellaneous 63 50
In‐house volunteers 590 525
Gifts in kind:
Capital equipment ‐ 333
Miscellaneous 318 47
Total 2,086$ 2,666$
The Museum receives contributed services from over 350 volunteers working in various capacities across the
institution. US GAAP specifies that the value of volunteer time may be recognized as income and expense when
the service provided requires specialized skills for which the Museum would otherwise have paid. For the year
ended June 30, 2019, the value of contributed services meeting those criteria was $590,000. The value of
contributed time not meeting the recognition criteria was $73,000. Volunteer time contributed across all
categories totaled 15 full‐time employee equivalents.
NOTE 13 – GOVERNMENT AWARDS
The Museum has received federal and state government awards to support both its general operations and
specific projects and programs. Funds expended in connection with these grants are subject to review or audit
by the granting agencies. Government support was as follows for the years ended June 30:
(in thousands) 2018
State Federal Total
Direct cost support 4 6
General operating support 57$ 57$ 57$
Exhibits 934 934 808
Programs 50$ 1,691 1,741 1,838
Capital projects ‐ 588 588 489
Other ‐ 33 33 11
50 3,303 3,353 3,203
Indirect cost recovery ‐ 670 670 818
Net change in estimate for
unbilled subawards ‐ (287) (287) 444
Total 50$ 3,686$ 3,736$ 4,465$
2019
These figures include only transactions under awards as that term is defined in applicable government
regulations. Revenue under contracts and other agreements whereby a government entity procures goods or
services from the Museum in the same manner as a non‐government customer are recorded on the revenue line
associated with the goods or services procured.
The Museum’s federal awards include substantial subawards. At the end of each fiscal year, the Museum
estimates and accrues charges incurred, but not yet billed, by its subawardees in order to more accurately reflect
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
26
total program costs in its financial statements. The accrual is reversed in the subsequent fiscal year as actual
subaward billings are received. As these amounts are estimates, the accrued charges are not billed to
government funders; only actual charges are submitted for reimbursement.
Funds awarded but not yet expended Funds under a government award for a particular purpose or program are not earned until the Museum incurs
expenses in the performance of the funded project, at which time the Museum recognizes the corresponding
award revenue. If a government agency advances cash to the Museum under an award, amounts not yet
expended are carried as a liability. As of June 30, 2018 the Museum had no such liabilities. Amounts awarded
but neither advanced nor earned are not reflected in the financial statements. Government funds awarded but
not yet expended totaled $5,065,000 at June 30, 2018.
NOTE 14 – SEPARATION OF BUSINESS UNIT
On February 2, 2018, the Museum signed an agreement separating its Clubhouse Network program into an
independent 501(c)(3) corporation. The Clubhouse Network is a community of 100 clubhouses located in 18
countries providing mentored afterschool programs to underserved teenagers to develop technological skills.
Individual member clubhouses are independent organizations, while the flagship site and network
administration were, prior to the separation, part of the Museum.
The separation agreement required the Museum to transfer certain financial assets to the new organization,
including various unexpended gifts and grants restricted to Clubhouse programs and a quasi‐endowment
designated for the same purpose. Total assets transferred were $1,472,000.
The new Clubhouse Network, Inc. is wholly independent of the Museum. However, the Museum will act as
fiscal agent on certain federal awards until such time as the Clubhouse Network develops the systems and
expertise to accept direct responsibility for these awards.
NOTE 15 – RELATED PARTIES
The Museum maintains vendor relationships with several companies, the principals of which are members or
related to members of the Museum’s Board of Trustees or Senior Management Team. All such relationships are
subject to the same procurement requirements, policies, and controls as the Museum applies to its other vendors.
The Museum expended funds totaling $194,000 and $505,000 for the years ended June 30, 2019 and 2018,
respectively, under these relationships.
Certain companies whose principals are members of the Museum’s Board may also from time to time procure
the services of the Museum’s Event and Conference Services department. Trustees receive a 15% discount on
pricing for such events; otherwise related‐party companies are subject to the same policies, pricing, and controls
as the Museum applies to its other customers. The Museum earned $49,000 and $84,000 for the years ended
June 30, 2019 and 2018, respectively, from these transactions.
NOTE 16 – SUBSEQUENT EVENTS
The Museum has performed an evaluation of subsequent events through October 31, 2019, which is the date the
financial statements were issued.
In July, 2019, the Museum undertook a major restructuring. The Museum offered a Voluntary Termination
Package to employees aged 61 or older and also effected a number of involuntary staff reductions. The Museum
expects to incur between $1,500,000 and $2,000,000 in severance and other costs related to this restructuring.
No other material subsequent events were noted.
Museum of Science Notes to Financial Statements – June 30, 2019 and 2018
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NOTE 17 – CONTINGENCIES
The Museum generally is subject to claims which arise in the normal course of its operations. In the opinion of
management, the outcome of these actions will not have a material adverse effect on the financial position of the
Museum. THE END.